Report | Wages, Incomes, and Wealth

Unprepared for Recession: The Erosion of State Unemployment Insurance Coverage Fostered by Public Policy in the 1980s

Briefing Paper #29

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The federal-state unemployment compensation system of the United States has two
purposes. First, the system is intended to provide prompt, partial wage replacement to
unemployed workers and their families through the payment of unemployment insurance
(Ul) benefits. Second, the system is designed to help in reviving the economy during
recessions by pumping trust fund reserves accumulated during the prior years of the
business cycle into the economy as unemployment spreads.

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